Opinion: Could Ford Australia have been saved?

The last Falcon rolls off the line tomorrow, but could it have prevented?

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Opinion: Could Ford Australia have been saved?

07 Oct 2016Andrew Maclean

This morning 600-odd Australians woke up as Ford Australia employees for the very last time.

Today they will all play a part in one of the most momentous occasions for the local automotive industry. As some have done for decades, they will don their blue and hi-viz overalls, pick-up their tools and bolt together a Ford Falcon - or two - and a Territory SUV - or two.

When the whistle blows, there will be cheers. There will be beers. And there will be plenty of tears.

By that time, the very last Ford models to be built in Australia will roll off the Broadmeadows production line; a blue XR6 Falcon followed by a white Territory SUV and then, finally, another blue, V8-powered XR8 Sprint; the 3,853,437th Australian-made Falcon.

It is a travesty considering the blue oval's local legacy extends back to 1925 and has, since then, been etched into our national psyche. Ford has been in threaded throughout our modern history, from pop culture icons to prime ministerial limousines and from taxis to Bathurst winners but most importantly as the backbone of affordable family transport. We've all experienced a Falcon in some form.

Not only will the closure of Ford's local manufacturing operations affect those factory workers that haven't managed to transition into another role with the blue oval's burgeoning research and development and engineering divisions that will continue to operate, it starts a ripple effect that will, by the end of next year, also account for Holden and Toyota workers in South Australia and Victoria respectively, not to forget thousands more involved in the supply chain of parts and services to the industry.

Ford Australia's Broadmeadows plant. Photo: Supplied

I feel for those that will be unemployed tomorrow afternoon. And I feel for those blue-blooded Ford fans that have championed the brand for decades, particularly those hardened enthusiasts cheering on the Falcon racers in this weekend's Bathurst 1000 at Mount Panorama.

It will be a sad day.

Ford has been an innovator in Australia - and for Australians - over the last 91 years, developing the Coupe Utility (the Ute) as long ago as the 1930s, creating the country's first muscle car with the GT Falcon in the late 1960s and the Falcon-based Territory remains our only domestically-produced SUV.

But it wasn't innovative enough to save itself. It tried, numerous times cup-in-hand to its masters in Detroit to build the Falcon in left-hand drive and open itself up to export markets. But it got knocked back every time. It tried, predicting the massive growth in SUVs and developed the Territory. But it got left behind pretty quickly. It tried, responding to increased petrol prices and the perception that its cars were gas guzzlers, creating a fuel-sipping Falcon with a modern four-cylinder turbo engine. But it was too little too late. It tried, recognising the swing to small cars and hurried a plan to assemble the Focus hatchback in Australia. But it couldn't compete with the lower labour costs of our Asian neighbours.

Ford Territory.

There has been some smart people at Ford Australia, from the corner office all the way into the trenches of the factories. But there has also been some snoozers too that held their head in the sand for way too long.

The government has also played a pivotal role in the success and failure of the local car industry. It protected it for a long time; applying heavy tariffs to imported vehicles that have slowly been eroded; giving grace to our low-tech engines by being a step behind Europe and America on emission output regulations; applying a luxury car tax on vehicles costing more than a top-grade Falcon or Commodore at the time; and handing over billions of dollars in financial support, tax concessions and engineering incentives. But then the Abbott/Hockey government pulled the umbilical cord and the car industry could no longer stand on its own feet.

Could it have been saved? That is a vexed question. Yes, Australia is one of the only countries in the developed world that, now, does not offer government assistance to domestic car manufacturing. Yes, Australia is one of only a handful of countries that drives on the left-hand side of the road. Yes, our way of life has created high labour costs. And, yes, Ford could have predicted seismic market shifts earlier.

But there is no use pointing fingers. The automotive world is changing at such a rapid rate through new technologies – safety innovations, fuel-economy improvements, connectivity and electric cars – that is impossible to see how we could have kept up with it anyway, particularly without co-investment and considering there hasn't been a stable (or mature enough) political environment on which to build long-term sustainable energy and/or scientific development policies that could factor in where the car industry would be 20 years out.

As tragic as it is, personally I think tomorrow was inevitable.

Ford Australia invented the coupe utility and started a worldwide trend.

Drive Ratings

2016 Ford Falcon XR6

Drive Comments

JM | 06 Oct 2016 12:21

For me it is very sad to this happen I was with Ford when I was young in the early seventies, I did my trade with Ford at Broadmeadows and have many memories of this period. What a shame to see this happen.

Tangojulietfoxtrot JM | 11 Oct 2016 02:19

Yes, our way of life has created high labour costs.
And no, that's not a significant factor in the cost of manufacturing motor cars in Australia. Even the blatantly anti-car industry Productivity Commission reported that labour makes up just 17% of the total manufacturing cost of motor cars produced in Australia.
And, yes, Ford could have predicted seismic market shifts earlier.
Really? You didn't and nobody else did either. There were strong predictions of a GRADUAL shift away from large sedans, but nobody saw their sales fall off a cliff. Likewise the massive uptake in crew cab utes thanks to a large extent to the FBT break provided, or sales and conversions for LPG drop by 66% in a year, or the ability to have the number one seller in the market with just 3,500 cars a month.
This article is the exception to the rule that hindsight is a perfect thing.
Read more: http://www.drive.com.au/motor-feature/opinion-could-ford-australia-have-been-saved-20161006-grwcjg.html#comments#ixzz4MjrTCgDX
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And, yes, Ford could have predicted seismic market shifts earlie

ZeeGermanDude | 07 Oct 2016 00:01

Andrew, your asking the wrong question!
You should be asking if we have our priorities right - are we doing the right thing as a country, and what do we do instead!?!
With all of Fords failures (and there are many), at the very least they were adding value to the country and our economy for most of the decades they were here - nothing, really nothing, that can be said from an imported so called luxury car, that sucks out money from our economy and is bought by people who???s only value adding activity is borrowing money and buying a none productive asset, and getting a nice tax break (negative gearing, novated lease) for it, paid for by the majority of the country and its future generations - who???s jobs getting eroded by the day as you just nicely described in your article???.any subsidy ever paid to Australian automotive is nothing compared to the (now) trillions of dollars that are tied up in mortgages and allowing people to buy foreign cars with proceeds of that borrowed money and the absolute useless none-value adding activities???. Or are you telling us that those individuals would have bought a Ford if it would e.g. consume less fuel - whom are you kidding....its pathetic

Unknown | 07 Oct 2016 01:51

RIP Mr Ford Australia.

paully from newcastle | 07 Oct 2016 04:19

Short answer - No
Longer answer - not when they, along with Holden, Mitsubishi, Nissan, Toyota, weren't building cars Australians want to buy.
Slightly longer, if only question. Both major parties should have tied any grants to building volumes. They want Aus taxpayer cash, they must ensure the production runs made them more efficient.
Why couldn't the Territory be sold overseas? Why couldn't it then be replaced by something in the same market segment, that both Australians & either the US or Asia want?
We'll never know. The price of subsidy, per car, was ludicrous, towards the end.

Bruiser | 07 Oct 2016 05:33

Of course Ford couldn't have been saved: it wasn't building cars people wanted to buy. The Falcon was a great car but who wants something that size? The Territory is a great car but they let it wither since the last upgrade (2008 was it?). Ford's (and Holden and Mitsubishi etc) problem was that they were both part of big global companies and factories here had to build what head office told them to rather than what people wanted to buy. Australia could have been world leader in 4WDs if Mitsubishi had built them here but they were too keen to keep the high-value vehicles in their own country. The Australian car market has been trending towards SUVs and small cars for decades yet Ford and Holden kept building huge things that only taxi drivers wanted. I rented a Calais last week, what a great car - but would I buy one? Imagine trying to park that thing within 20km of Sydney CBD. The local industry's problem has been that of foreign control and you have to say, if you were sitting in Tokyo or Detroit and had the choice of putting new capital into (a) Australia where people still get paid a lot, and (b) Thailand where they don't, the choice is fairly obvious.

Wibbavision M | 07 Oct 2016 05:55

Ford Broadmeadows could have been used to build RHD Ford F-series pick-up trucks and RHD Explorer SUVs ( given that no other Ford plant is doing that ) after Falcon / Territory production ceased . But that doesn't look like happening now . An opportunity lost .

jebiga | 07 Oct 2016 10:02

Why do we need manufacturing in this country?
Australians will continue to prosper by selling residential real estate to the Chinese at ridiculously inflated prices.
How utterly pathetic this nation has become.

Sniper56 | 07 Oct 2016 11:11

It's a very sad day for Ford Australia, all I have ever known were Ford vehicles. It's an even sadder day for Australia as a whole with many people losing their jobs and the after effect that brings down the line. And twelve months later Holden finishes up and we have lost the best two vehicle manufacturer's. Yes, there are those who prefer one vehicle to the other but that's what made it so special. I believe the car industry in Australia could have been saved. Quite some time ago Australian's were told there was an oil crises and fuel would be in short supply and we needed to rethink what vehicles we drive around in. This is when the downfall began along with the cheap imports from other countries which were sending our hard earned dollars overseas. This propaganda saw Ford deleting the V8 for some time and the push for smaller vehicle had begun, well sorry, I like large vehicles and have stuck with that practice. FPV brought back the hope of more power with the introduction of the Tickford XR6T and eventually the V8 returned with Tickford enhancements. Holden larger vehicle have suffered also and the same thing will happen come the end of next year. We were told the Australian vehicles were uneconomically viable to make here anymore so with imported vehicles the cost of the vehicle would be cheaper. Looking through dealership of all kind the small vehicle have jumped up in price with the Ford focus selling almost more than the last Ford V8. why is it that the government of this country sees fit to let everything go to be produced in other countries in the world? In the last 6-8 years the government effectively lost the jobs of thousand of motor vehicle employees and this will happen again at the end of that year. The government talks with fancy words and tells us it's the best time to be alive today but behind the scene's they are selling off this country to the highest bidder. Wonder what else they have installed for us in the next ten years? If big business wants to build a plant in Australia to produce whatever items they want, then the government on our behalf is obligated to tax that company the tax rate everyone else has to pay and not send the profits overseas.. It's shameful to lose all the jobs that will go and it's a black mark on the government.

Rollo Tommasi | 07 Oct 2016 18:41

The Australian Ford manufacturing closure in summary was due to Detroit decision making (remember Jac Nasser? He the Lebanese-Australian of Ford CEO fame and more recently BHP chairman status?) His Ford management team decided the ubiquitous Ford Falcon was only to be sold in Australia-New Zealand and nowhere else in the world. So the Falcon, with natural markets in Southern Africa or the Middle East, never mind hoon-centric North America, never got to spread its' proverbial six or eight cylinder wings. And when Campbellfield and Lara, being the one-trick pony making Falcons and its' ilk had their production line closed due to high costs of manufacturing and low volume output, poof went the Ford manufacturing market in Australia.

Mauro Trentini | 07 Oct 2016 23:20

So sad!! :-(
our way of life has created high labour costs - This can become a big problem for the future of our country

Peter Gaskin | 08 Oct 2016 07:32

Andrew -check your timeline. Ford announced their closure while ALP was in government. Holden announced their closure when LNP took office. Yes Ford needed to be able to export lots of Falcons and Territories to survive, but they also needed to sell at least 60,000 cars a year produced in Australia at full price - not at a discounted price. So the consumers of Australia ultimately decided the fate of Ford Australia.

Mat | 08 Oct 2016 22:48

It is indeed sad to see it go and I feel for all involved but sadly if your'e relentlessly building a product no one wants then you sadly help your own demise. Iv'e owned two Fords and whilst they were roomy and went well, fuel consumption was woeful in the real world and my series two EL fairmont was beyond any measure the worst pile of unreliable junk I ever had the miss fortune of owning. The warranty was a joke and the customer service even worse my other car was an old 190E Mercedes with 800,000km on the clock, never once let me down and the service you got was just fantastic. Traded the Ford for a Holden which was reliable but the rattles drove you insane so now I just buy second hand Merc's. It's sad that when Ford finally got to the point they screwed a car together well, it had become irrelevant. Mercedes could have kept building E and S classes, but had they not started building smaller variants well they too would have ended up like this, you have to change to meet demand ford didn't and so it is a sad last chapter is written. I do smile when I see the old imported borrowed money argument, and the finance for a Ford come from where? Over half the Benz's sold in Australia see the government make more money off them than the factory does, so if we stopped importing all Euro's tomorrow where would the government find that revenue from? There is one thing small business and big business have in common, if you need subsidies to survive then eventually you'll get bitten using millions of tax payers dollars to build a product no one wants is not smart for anyone. It's a sad ending to what I consider to be a piece of Australia's culture from a time when we could afford to be care free.

Richard Talbot | 09 Oct 2016 04:05

Yes it could have & should have been saved. Many other advanced countries around the world support via subsidies their vehicle manufacturing industry. Australia should have too. Just add up the numbers with all the workers being put out of a job, many not being able to ever find any meaningful employment again. Its not just the Ford workers either but thousands of workers in the related vehicle supply/parts industry
Taxpayers funds would be better spent on keeping people in work rather than paying the dole to remain unproductive thru no fault of their own
Bad move by our political representatives to have allowed this to occur. They should hang their heads in shame

Mauro Trentini | 09 Oct 2016 09:34

:-(

roobin | 09 Oct 2016 09:36

Ford in Detroit could have saved the plant back in 2009 but chose not to and handed back the money to convert the Falcon to left hand drive for export. Wanted to sell cars for $6/hr

Gary Quinlan | 09 Oct 2016 12:28

We are part of the global economy and need to compete in that economy. Ford's problem was that the Falcon was not a global platform meaning sales had to cover local costs which they could not on two scores. Firstly, the Falcon was seen as increasingly irrelevant by both private and fleet buyers, thus falling sales. Secondly, the labour cost of car manufacturing employees in Australia (base rate, penalties etc) is substantially higher than what a German National gets working in a German plant and no reasonable person would attempt to argue that Germany has a lower standard of living or lower cost of living than Australia!